Author: Alan Matthews

Alan Matthews is Professor Emeritus of European Agricultural Policy in the Department of Economics at Trinity College, Dublin, Ireland. His major research interests are agricultural policy analysis, the impact of international trade on developing countries, and computable general equilibrium analysis of trade and agricultural policy reforms. He has worked as a consultant to the European Parliament, the OECD, the Food and Agricultural Organisation of the United Nations and the UN Industrial Development Organisation, and has been a panel member in a number of WTO Dispute Settlement procedures. He is a former President of the European Association of Agricultural Economists but writes here in a personal capacity.
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More on the European Innovation Partnership for Agricultural Productivity and Sustainability (EIP-A)

One of the themes of this CAP reform is the need for a major increase in research and innovation to address the urgent social challenges of providing more food in an environment of increasing land use competition and pressures on resources and the environment. Whether the Commission’s proposals actually deliver on this objective is still an open question.

Three instruments are envisaged in the Commission’s CAP reform proposals to support this agenda:
• Continued support in the Rural Development Pillar 2 for investment in physical assets, business development, cooperation for the development of new products, processes and technologies in the agriculture and food sector as well as a revamping of farmer advisory services to broaden their scope and improve their effectiveness.
• A new European Innovation Partnership instrument for agricultural productivity and sustainability (EIP-A) also in the Rural Development Pillar.
• Increased funding for agricultural and food research under the Commission’s Horizon 2020 research programme.… Read the rest

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Changing global agricultural power

The Oxford Farming Conference which is held in the first week of January each year in the UK provides an opportunity for UK farming leaders to discuss the ‘big issues’ affecting the industry. This year, the Conference commissioned a report Power in Agriculture from the Scottish Agricultural College to examine the dynamics and implications of global agricultural power.

The purpose of the report was to examine where the economic, political and natural resource power currently lies in world agriculture, how that might change in the future, and what it means for British farmers. But the approach and findings clearly have a broader interest.

Sources of global agricultural power

The report raises three intriguing questions. What do we mean by global agricultural power? Why might it be important? And how can we measure it?

Power can be defined as the ability to persuade, compel or influence other actors to do something which benefits the actor or country exercising power.… Read the rest

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Commission projects unchanged sugar market following quota elimination

Further details on the Commission’s expectations for the EU sugar market following the end of sugar quotas in 2015 are contained in its market outlook to 2020 publication published last month.

This medium-term outlook for the EU sugar market is based on a status quo assumption for agricultural and trade policy. The Commission notes that its CAP towards 2020 legislative proposal confirms the existing provisions on expiry of the regime after the marketing year 2014/15. Thus it argues that the policy assumption on the expiry of sugar quotas is in conformity with existing legislation.

In my own review of the legislative proposals I argued that the Commission’s decision not to propose an extension to the sugar quota regime after 2014-15 is a part of the 2013 CAP reform, on the grounds that this was the first time that the Commission had made its intentions clear. But formally the Commission is correct that the current legislation expires in September 2015 and would require a positive decision to extend it.… Read the rest

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The changing landscape of agricultural support

Discussions on reducing agricultural support in the Uruguay Round and, especially, the WTO Doha Round have been framed increasingly in North-South terms. Developing countries have sought reductions in OECD country agricultural support while developed countries have sought increased access to their manufacturing and services markets in exchange.

However, the landscape of agricultural support is changing. While levels of agricultural support and protection have been falling in OECD countries (helped by high world market prices), agricultural support in a number of (but not all) emerging economies has been increasing (despite the increase in world market prices).

These changes in the global distribution of agricultural support have two main consequences. First, the pattern of global agricultural trade is increasingly influenced by agricultural policy interventions in non-OECD countries, even if OECD countries still have a predominant weight in global agricultural production and trade.

For example, world cotton prices which are a concern for the West African C-4 countries in the WTO are now more distorted by subsidies in China and Turkey than by subsidies in the US and the EU.… Read the rest

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Europe’s hens to have a happier New Year

From tomorrow, 1st January 2012, life for the EU’s laying hens becomes a little better when EU Council Directive 1999/74/EC on the Welfare of Laying Hens comes into force. Under the Directive the use of conventional cages (commonly referred to as ‘battery cages’) for laying hens will be prohibited in the EU as will the marketing of eggs from hens housed in such cages.

The ban on battery cages follows the EU-wide ban on veal crates for calves which came into force in 2007, and will be followed next year by a ban on sow stalls and tethers which comes into force across the EU on 1 January 2013. These are the first pieces of legislation to phase out methods of production due to animal welfare concerns.

The use of cages

The Directive initially required a minimum space requirement for battery hens in conventional battery cages per bird of 550 cm2, about the size of a sheet of A4 paper, from 1 January 2003.… Read the rest

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Environment Ministers fail to endorse Commission's greening proposals

The refusal of the Environment Council meeting on 19 December last to endorse the Commission’s greening proposals in its legislative proposals for CAP reform has been interpreted as a victory for agricultural interests attempting to water down the greening element in these proposals. But this interpretation may underestimate the extent to which there is genuine doubt about the effectiveness and environmental value of the measures that the Commission proposes.
The biodiversity challenge

The Environment Council was meeting to adopt conclusions on the EU biodiversity strategy to 2020. In March 2010, EU leaders recognised that the 2010 biodiversity target would not be met despite successes such as establishing Natura 2000, the world’s largest network of protected areas. They went on to endorse the 2050 long-term vision and the 2020 headline target proposed by the Commission in its Communication Options for an EU vision and target for biodiversity beyond 2010.
Subsequently, the Commission proposed its 2020 Biodiversity strategy in its Communication Our life insurance, our natural capital: an EU biodiversity strategy to 2020 which includes six mutually supportive and inter-dependent targets that respond to the objectives of the 2020 headline target.… Read the rest

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Environment Ministers fail to endorse Commission’s greening proposals

The refusal of the Environment Council meeting on 19 December last to endorse the Commission’s greening proposals in its legislative proposals for CAP reform has been interpreted as a victory for agricultural interests attempting to water down the greening element in these proposals. But this interpretation may underestimate the extent to which there is genuine doubt about the effectiveness and environmental value of the measures that the Commission proposes.

The biodiversity challenge

The Environment Council was meeting to adopt conclusions on the EU biodiversity strategy to 2020. In March 2010, EU leaders recognised that the 2010 biodiversity target would not be met despite successes such as establishing Natura 2000, the world’s largest network of protected areas. They went on to endorse the 2050 long-term vision and the 2020 headline target proposed by the Commission in its Communication Options for an EU vision and target for biodiversity beyond 2010.

Subsequently, the Commission proposed its 2020 Biodiversity strategy in its Communication Our life insurance, our natural capital: an EU biodiversity strategy to 2020 which includes six mutually supportive and inter-dependent targets that respond to the objectives of the 2020 headline target.… Read the rest

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The challenge of moving to the regional model

The Commission’s legislative proposals for the CAP post 2013 contain two measures to harmonise direct payments per ha across farms: (i) a move to more uniform payments per hectare across member states, and (ii) a move to more uniform payments per hectare within member states by moving from the historical to the regional model of payments. While both measures are prompted by the desire to have a more uniform distribution of payments per hectare across EU farms, it is useful to keep the measures distinct. For that reason, it is helpful to talk about the convergence of payments across member states, and the flattening of payments within a member state.

The argument for flattening payments within a member state is that differences in the level of payments per hectare due to historical factors can no longer be justified, and that tying the value of entitlements to historical performance is unfair as between farmers themselves.… Read the rest

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CAP reform conference December 19th 2011

The Commission in co-operation with the Parliament is organising a conference ‘CAP reform through analytical lenses‘ to provide a forum for discussion on the CAP reform legislative proposals with researchers and scientists. The event will take place during the meeting of the European Parliament’s Committee on Agriculture and Rural development to be held in Brussels on Monday 19 December and will be web-streamed. The agenda for the meeting is here.

This post is written by Alan Matthews… Read the rest

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Agreeing the allocation of CAP funds between Member States

The great bulk of EU CAP expenditure (the Heading 2 ‘Preservation and management of natural resources’ in the 2007-2013 Multi-annual Financial Framework) is allocated to member states in the form of national ceilings under Pillar 1 and national breakdowns under Pillar 2. One of the reasons for the success of the Fischler and Health Check reforms was that they did not fundamentally alter the allocation of member state receipts.

Redistribution a central issue in CAP 2020 negotiations

The distribution of CAP funds between states is now a central issue in the CAP negotiations given the commitment to bring about greater convergence in the level of entitlement payments per hectare. There is certainly no logic in the current distribution which reflects the historical legacy of the origin of the payments as compensation for support price reductions for particular commodities, as well as the outcomes negotiated by the new member states over the size of their Pillar 1 and Pillar 2 envelopes as part of their treaties of accession.… Read the rest